Tesla Negotiating Nickel Supply with Indonesia

According to a series of reports, Tesla is currently holding talks with the Indonesian government to create a company in the Asian country that will allow it to ensure the supply of nickel. Tesla’s concern about this material is not trivial, as the cells used in models such as the Semi truck or the Cybertruck pick-up will have a higher percentage of nickel than the batteries currently used in the rest of the manufacturer’s range.

At the time, Elon Musk himself, Tesla’s CEO, asked the mining industry to strengthen the supply of this mineral, promising a long-term contract to that company that would be able to extract it efficiently and sustainably. The firm is also currently in negotiations with several Canadian companies to ensure supply.

Ayodhia Kalake, a senior Indonesian government official, has stated that the talks with Tesla are still in their early stages. Indonesia is currently one of the largest nickel producers globally, and this year it is expected to increase its capacity by 46%, reaching 550,000 tons per year.

On the other hand, the government has recently banned its export from forcing the industry to process it locally, thereby encouraging job creation and strengthening the region’s economy. Therefore, if Tesla wants to secure its nickel supply from Indonesia, it will have to make a significant investment to process it in the country itself.

Indonesia has also recently struck a deal with LG Chem and CATL, two of the world’s largest battery manufacturers, to build a country’s factory. It is interesting to note that both LG Chem and CATL currently supply cells to Tesla for the Model 3 produced in Giga Shanghai, the brand’s first plant on Chinese soil.

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